ITV has attracted headlines thanks to Honey G’s appearance on the The X Factor – but its revenues are still down.
Photograph: Syco/Thames/Dymond/PA

ITV has suffered its worst performance in the runup to Christmas in almost a decade, as advertisers become increasingly cautious about the economy.

“In recent weeks the political and economic uncertainty has increased and we are currently seeing more cautious behaviour by advertisers,” said the ITV chief executive, Adam Crozier.

The broadcaster said TV ad revenues across the first nine months of 2016 were down by 1%. But for the final quarter they fell 7% after a drastic softening in the market as jittery advertisers held back spending after the uncertainty caused by the Brexit vote.

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The 7% decline in the final months of the year is the worst year-on-year fall ITV has reported since recording a 9% drop in the fourth quarter of 2008.

The underlying performance is even worse given that ITV is now adding in revenue from UTV, the Northern Ireland ITV franchise it acquired for £100m last year, which analysts say adds 1.5% to 2%.

Crozier has already announced £25m in cost savings for 2017 and last month cut 120 jobs, citing the political and economic uncertainty of a potential Brexit slowdown.

He now expects TV ad revenue for the full year to be down 3% but expects the group to still outperform the UK TV ad market as whole.

“Our strong on-screen performance and continued ability to deliver mass audiences gives us the confidence that based upon the deals we have done we will also outperform our estimate of the TV ad market in 2017,” he said.

Crozier said that ITV’s £1bn-plus programme budget will be £25m lower next year as the broadcaster will not have to pay the rights cost for a major sports event; this year it aired Euro 2016 matches and in 2015 the Rugby World Cup.

In a call with analysts ITV said that the combined £50m in cost savings will be enough for it to offset a fall of up to 3% in TV ad revenue next year.

ITV’s total revenues grew 5% to £2.15bn in the nine months to the end of September.

Crozier said that despite the TV ad slump he expected ITV’s full year earnings to remain resilient, citing the growth in its online, pay and interactive business and ITV Studios production arm.

“Even against the current uncertain economic backdrop we expect 2016 earnings to be broadly in line with last year,” he said. “ITV is now a much more balanced and resilient business.”

Stripping this out, ITV Studios saw revenues decline 9% on an organic basis in the first nine months. Analysts at Jefferies said this was a “disappointing” performance.

ITV put this down to factors including there being no series of £50m global franchise Hell’s Kitchen this year – two are scheduled to air in 2017 – and cancelled dramas including Texas RIsing and Best Time Ever.

“We remain committed to our strategy of rebalancing and strengthening ITV and building a global content business of scale and we see clear opportunities to continue to invest for further growth across the business both organically and through acquisitions,” said Crozier.